Those familiar with my analysis know that when I talk about trend, either futures or futures spreads, I look at three different time frames: The minor (short-term) on the daily charts, secondary (intermediate-term) on the weekly charts, and major (long-term) on the monthly charts. Also, there are three different directions that trend can be: up, down, and sideways (yes, sideways is a direction). Each time frame and direction can tell us something different about the underlying market, leaving us the job of piecing it all together. It is interesting to note that a market can be showing trends in all three directions. An example of just such a situation is in soybeans at this time.
Most of the questions I've received have had to do with soybeans. On the monthly chart (long-term) the market continues to show an uptrend, with the last major signal a bullish key reversal this past August. However, pressure has been seen on both the daily and weekly charts, with the daily chart showing a downtrend that soon be coming to an end and a secondary sideways trend that has the January contract testing price support near $12.48.
Trends in futures spreads are similar, simple reflections of price direction over time. However, a trend that is sideways can still be bullish (e.g. soybeans) or bearish (corn) depending on the level of carry inverse (backwardation) or carry (contango) at which the spreads are consolidating.
One last thing, keep in mind what the various trends of futures and futures spreads are showing. The trend in spreads reflects the opinion of commercial traders on the three different time frames. Uptrends indicate the view of supply and demand is growing more bullish, with downtrends hinting at a more bearish outlook. The trend in futures indicates the flow of money into or out of a market by the noncommercial side of the market. If a futures market is in an uptrend (wheat secondary) then this group is likely buying. If a futures market is in a downtrend (corn), it can be assumed that noncommercial traders continue to sell.
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